•Contract: An agreement between two or
more parties to perform or to refrain from some act now or in the future.
A legally enforceable agreement.[4301]

•Requisites
for Contract Formation (Elements) 4305

•Agreement: One party must offer to enter into an agreement, and the
other party must accept the terms of the offer

•Consideration: Something of value received or promised,
to convince a party to agree to the deal;

•Contractual Capacity/ competent parties: Both parties must be competent to
enter into the agreement;

•Legality: The contract’s purpose must be to accomplish some goal
that is legal and not against public policy;

•Genuineness of Assent (Arguably part of agreement): The apparent consent of both
parties must be genuine; and

•Form: The agreement must be in whatever form (e.g., written,
under seal, etc.) the law requires.

UNILATERAL AND BILATERAL CONTRACTS
[4302]

•Every contract
involves at least twoparties -- the offeror/ promisor,
who makes the offer/promise
to perform, and the offeree/promisee, to whom the offer/promise is made.
[4303]

•Unilateral Contract: A unilateral contract arises when
an offer can be accepted only by the offeree’s
performance (e.g., X offers Y $15 to mow X’s yard). 4302.08

•Bilateral Contract: A bilateral contract arises when a promise is given
in exchange for a promise in return (e.g., X promises to deliver a car to Y,
and Y promises to pay X an agreed price). 4302.09

•Express Contract: A contract in which the terms of the agreement are
fully and explicitly stated orally or in writing.[4302.01]

•Implied-in-Fact Contract: A contract formed in whole or in
part by the conduct (as opposed to the words) of the parties. In order to
establish an implied-in-fact contract, [4302.02]

(1)the plaintiff must have furnished some service or
property to the defendant,

(2)the plaintiff must have reasonably
expected to be paid and the defendant knew or should have known that a
reasonable person in the plaintiff’s shoes would have expected to be paid for
the service or property rendered by the plaintiff, and

(3)the defendant must have had
the opportunity to reject the services or property and failed to do so.

•Quasi
or Implied-in-Law Contract: A fictional contract imposed on parties by a court in the
interests of fairness and justice, typically to prevent the unjust enrichment
of one party at the expense of the other.[4302.03]

FORMAL AND INFORMAL CONTRACTS
[4302.04/5]

•Formal Contract: A contract that requires a special
form or method of formation (creation) in order to be enforceable.

•Contract UnderSeal: A formalized writing with a
special seal attached.

•Recognizance: An acknowledgment in court by a
person that he or she will perform some specified obligation or pay a certain
sum if he or she fails to perform (e.g., personal recognizance bond).

•Negotiable
Instrument: A
check, note, draft, or certificate of deposit -- each of which requires certain
formalities (to be discussed later).

•Letter of
Credit: An
agreement to pay that is contingent upon the receipt of documents (e.g.,
invoices and bills of lading) evidencing receipt of and title to goods shipped.

•Informal Contract: A contract that does not require a specified
form or method of formation in order to be valid.

•The vast
majority of contracts are informal (without a seal).

EXECUTION AND VALIDITY OF CONTRACTS

•Executed Contract [4302.11]: A contract that has been
completely performed by both (or all) parties. By contrast,

•An executory contract [4302.10]is a contract that has not yet been fully performed
by one or more parties.

•A void
contract [4302.14]is a contract having no legal force
or binding effect (e.g., a contract entered into for an illegal purpose);

•A voidable contract
[4302.15] is an otherwise valid contract that may be legally avoided,
cancelled, or annulled at the option of one of the parties (e.g., a contract
entered into under duress or under false pretenses); and,

•An unenforceable contract is an otherwise valid
contract rendered unenforceable by some statute or law (e.g., an oral contract
that, due to the passage of time, must be in writing to be enforceable).

CONTRACT INTERPRETATION

•The
key to contract interpretation is to give effect to the
intent of the parties as expressed in their agreement.

•Intent is generally
to be ascertained objectively -- by looking

at

(1)the words used by the parties in the
agreement,

(2)the actions of the parties pursuant to
the agreement, and

(3)the circumstances
surrounding the agreement

as they would be interpreted by a
reasonable person -- rather than the parties’ subjective intentions (usually
expressed after the fact).

•The Plain Meaning Rule: When a contract is clear and
unequivocal, a court will enforce it according to its plainterms, set forth on the face of the
instrument, and there is no need for the court either to consider extrinsic
evidence or to interpret the language of the contract.

RULES OF INTERPRETATION - [4321]

Know these, they show up all the time…

•Rules of Interpretation:

When a contract contains ambiguous
or unclear terms, a court will resort to one or more of the following rules in
order to determine and give effect to the parties’ intent.

•Insofar as
possible, the contract’s terms will be given a reasonable, lawful, and
effective meaning.

• The contract
will be interpreted as a whole various and its various provisions will be
“harmonized”to
yield consistent expression of intent.

•Negotiated
terms will be given greater consideration than standard-form, or
“boiler-plate,” terms.

•A
non-technical term will be given its ordinary, commonly-accepted meaning, and a
technical term will be given its technical meaning, unless the parties clearly
intended something else.

•When the
language used in a contract has more than one meaning, any ambiguity is
construed against the drafting party.

•An ambiguous
contract should be interpreted in light of pertinent usages of trade in the
locale and/or industry, the course of prior dealing between the parties, and
the parties’ course of prior performance of the contract.

•Express terms
are given preference over course of prior performance, which is given
preference over course of dealing, which is given preference over usage of
trade.